Solving The Problems Of NSW

I am a big proponent of looking for the non-obvious solution to problems. In fact I would go so far as to say that in the era of digital disruption pretty much every time the obvious solution is used it goes belly up after a short period of time.

Look at New South Wales. The infrastructure in the state has been run into the ground for the last dozen or so years. Roads, Hospitals, Railways, Power – they are all an absolute mess.

What has the government done? Pretty much nothing in the hospital sector; undertaken a bunch of private public partnerships in roads that have led to the creation of a bunch of toll ways with the private operators of the tollways not meeting their targets and invoking clauses in the agreements that ensure that the state (i.e. the people) have to bail out the corporates for lost revenues.

Over the last month or so there have been announcements of cancelled railway projects that were to be critical to the growth of the outer suburbs of Sydney too.

The project to improve ticketing automation has run late and cost tens of millions of dollars too…

Oh, and by the way, because of the financial crisis, houses are not selling and therefore stamp duty revenue is down the toilet.

Get the picture?

Here is the non-obvious answer to the problem:

1) Make all rail and bus tickets free. This will motivate people to catch public transport instead of taking their cars to the city.

2) At the same time introduce a tax on peak hour access to Sydney CBD. Another motivation to catch public transport.

3) Calculate the value of the savings in carbon emissions and cost that as part of the emissions trading scheme. There has to be a serious net benefit to the economy of the state there alone.

4) This will also mean that we don't need the expensive ticketing machines and software that had been planned. So another saving. You also don't need ticket collectors, and you don't need turnstiles so the flow of people is more efficient.

5) Instead put more traffic police on trains to ensure that there is a reduction in crime.

6) Use the whole carbon trading scheme and this strategy to underpin the investment in new railway links to the suburbs.

7) Reduce the stamp duties on houses that sell for under 3 Million to 1%. This means that the majority of housing transactions will not have the added burden of a state tax on them that must discourage people from moving house – except for first home buyers who are current exempt. So the net effect is to aid the real estate industry.

8) Solar energy. Introduce a levy on the gross inputs to the grid from domestic solar and at the same time increase the cost of electricity to both business and the home. This will be a double motivation for people to invest in the capital cost of installing solar. The effect should be to enable people to repay the cost of the installation within 3 years. The positive impact on jobs will be tremendous. More people will spend more money on solar. Electricians will be employed and no one will worry too much about electricity being privatised any more. Additionally there will be a strong net benefit to green house gas emission management. So it is a win-win.

I could go on.

Every decision that is currently made by the NSW State Government is 180 degrees wrong. All we need to do is look at what the knee jerk reaction is in MacQuarrie Street and ensure that the opposite is done. That way more people are employed, they spend more money, real estate values stop tanking, traffic congestion is solved, and the state becomes efficient.

You can't have efficiency in the system when you introduce ways to increase friction all the time. The state's purpose should be to help lubricate the system!

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